Methods used for determination of stock prices during the initial public offering, short and long term pricing performances after public offering, an analysis at the Istanbul Stock Exchange

Going public is the most important tool for the companies to provide finance, increase liquidities and institutionalize all over the world. Offering to public plays an important role in the development of the economy of the country by means of the supplement they provide for the administrations, stock spreading and directing the savings to real sectors.An administration?s providing finance by means of public offering is only available in an appropriate time and pricing. Determining the pricing of public offering is the most critical stage of public offering. The reason for this is to relate the starting points of shares both in long and short term with the determined public offering price. In our country, discounted cash flow and market multiplier methods are seen to be the mostly used methods. In finance literature, the offer of shares with a price under its real value is called ?under-pricing? and the offer with a price over its value is called over-pricing.The topic of our thesis is to examine the long-term and short-term performances of the shares of administrations that offer first to public in the period of 2000-2007 in Istanbul Stock Market and to find out the factors that affects this performance. With the help of this, it is thought that whether investing on the shares of the administration the first offer to public is a benefit for the investors or not. As in other countries, under-pricing is seen in our study with the 68 administrations that first offers to public in the period of 2000-2007 in Istanbul Stock Market. Average incomes of the administrations (first offered to the public) that have been corrected according to the first day market incomes are proved to be % 6, 7. Moreover, in our study, the factors influencing the pricing performance of administrations first offered to public by using the multi-regression analyzing are tried to be found out. As a result of this analysis, it is found out that among independent variables, the age of the administrator, the fund amount collected in the public offering, active size of the administrator, standard deviation that is used for measuring the ambiguity of future performance of the shares and the fact that the first day incomes has an effect on the under-pricing.Key words: initial public offering, under-pricing, public offering price, multi-regression analysis, short and long term pricing performances.